War which, is the science of destruction has
started casting its formidable shadows on Pakistan's economy much
before the action is taken by the US or allied forces against what it
is being described as war against terrorism.

The suspension of flight operations by a majority
of International Airlines to Pakistan, cancellation and hold up of
orders by E.U. and USA mainly in the textile sector which is the
mainstay of Pakistan's economy are going to have crumbling effects.
Consequently, a drastic cut in the receivables of the government on
account of revenue, slow down of production in the manufacturing
sector and lay off of the workers in industrial sector seem to be the
price of the current situation.

Leaving aside the economic losses, it will be from
failure of human wisdom if war brings bloodshed and dislocation of
hundred of thousands innocent people in Afghanistan having nothing to
do with terrorism.

Zubair Motiwala, President of Karachi Chamber of
Commerce and Industry told PAGE that the US Consul General has
indicated in a meeting that the democracy related sanctions might also
be lifted probably on coming Tuesday. The sanctions against Pakistan
were imposed as early as 1987 with the Symington Amendment to prevent
Pakistan from seeking nuclear military capability, followed by the
Pressler Amendment and the Glenn Amendment aimed at bringing
Pakistan's economy to a fix. There was in addition the Brooke Law in
respect of arrears of payments, which Pakistan had to make to the US.

Finance Minister Shaukat Aziz and the ambassador
Wendy Chamberlin have made it clear that Pakistan has made no demands
on the US in return for providing unstinted cooperation against
terrorism. But the finance minister has identified four areas where he
would expect European assistance and US. They include full access to
Pakistani goods to the US and European markets, larger bilateral
assistance, western backing for larger assistance from multilateral
aid agencies and generous rescheduling of repayment of loans instead
the normal debt relief.

While negotiations in respect of larger economic
assistance from the US are yet to begin, high level delegations from
European Community and Japan have already visited this country to
enlarge the scope of cooperation with Pakistan.

Pakistan's importance in the current escalated
struggle against terrorism has been enhanced by the fact that it has
become a frontline state in the US campaign against terrorism. With
the increase in foreign aid to Pakistan and risk of being flooded by
more and more Afghan refugees would also be on the increase coupled
with drug trafficking and spread of illegal arms all over the country
which provide fuel to street and politically backed law and order in
this society.

KCCI

Zubair said that there are indications that
Pakistan may be allowed a 20-year interest free moratorium for
repayment of foreign debt besides free access to EU and USA markets.

The incentives so far announced including lifting
sanctions against Pakistan and rescheduling of US loans amounting to
$375million seems to be an eye wash in the face of the magnitude of
the economic hardships in store.

Commenting on the current situation, Abdul Razak
Dawood, the federal minister for commerce feels that Pakistan had
become "an unwitting victim to post-Sept 11 uncertainty"
that could jeopardize the very objective of joining the US to fight
against terrorism.

"We are currently looking into the details and
volumes of export losses but this could be in the region of $1 to $1.4
billion, said the minister. Pakistan had been in discussion with the
authorities in the United States, the European Union and Canada asking
them to give equitable market access to Pakistan products so that more
job opportunities could be created for local people. To maintain the
momentum of trade liberalization it is absolutely important that major
trading partners provide us equitable market access that will help
creating new jobs. The economic strategy of the present government had
been to create jobs for the people through structural reforms, fiscal
discipline and market driven policies but the recent developments had
created severe problems for Pakistan.

Razak feels the September 11 incident has really
introduced a serious challenge to Pakistan's economic policies. The
country seems to be becoming the unwitting victim to this uncertainty.
Pakistan is facing severe consequences' the minister said and added
that Pakistan was really concerned because of cancellation of export
orders in the middle of buying season and because the rising cost of
production.

Increase in freight rates, imposition of war risk
insurance, high cost of imports and higher inventory's maintenance are
causing problems for Pakistan, the minister observed. According to
Qamar Baig, Secretary Commerce, the exact assessment of export erosion
could not be ascertained at the moment. He however said that it was
not the question of export orders cancellation but Pakistan's real
concern was that main buyers were putting on hold new orders.

Iran

Iran's leadership has given mixed signals over a
global war on terrorism with supreme leader Ayatollah Ali Khamenei
blasting US plans to attack Afghanistan and Foreign Minister Kamal
Kharazi saying "Washington had a right to self defence".

While arguing with European envoys over the nature
of terrorism, Iran indicated it did not oppose action led by the
United Nations, and called for the replacement of the Taliban. The
Islamic Republic of Iran will not provide any help to America or its
allies in their attack on Afghanistan, Khamenei said.

America does not have the competence to guide a
global movement against terrorism and Iran will not participate in any
move which is headed by the United States, state radio quoted him.
Repeating Iran's call for any global movement against terrorism to be
led by the UN, Khamenei said that in this way the United States and
other powers cannot exercise influence on it.

The US government has decided just as it did during
the Persian Gulf war to expand its influence in the region and on
Iran's eastern borders under the pretext that some of the accused,
whose guilt has not been proven are in Afghanistan, he charged.

Kharazi told a joint Press conference with a
European delegation that if they can prove a certain group in a
country perpetrated the attack, "certainly the United States has
the right to self defence".

"Otherwise an attack against a country can
lead to a humanitarian crisis and the death of innocent people which
would be another disaster," he said.

Solidarity day

Pakistan's armed forces will not join any action
against Afghanistan, said Interior Minister Lt. Gen. (retd.) Moinuddin
Haider while addressing a gathering in connection with Solidarity Day
held in Karachi on Thursday.

He said that President as well as the official
spokesman has stated that armed forces of Pakistan will not join any
action against Afghanistan and will not be a party in any land attack.

Moinuddin said that in collaboration with the
international community, "our efforts would be that poor people
of Afghanistan are saved from coming difficulties. For the search of
those involved in acts of terrorism, the pinpointed targets should be
pursued so that the entire Afghan nation does not suffer.

He said that out of three nations that had
recognized Afghanistan, two have severed their diplomatic relations
with the Taliban government as they differed from their policies
besides not paying heed in their advice.

The minister was of the view that Pakistan the only
country that still sticks to principles so that a window for
negotiation remains open.

He pointed out that the Afghan nation has dispersed
during the past two decades and you can find Afghans in any country
around the world. A large number of refugees running in millions are
present in Pakistan and Iran and tens of thousand refugees are feared
to influx into Pakistan because of the prevailing situation.

We have also been asking them to adopt a moderate
approach and keeping in view the gravity of the situation to save the
country and the people. But their stance is hard. Gen. Moinuddin
Haider added that although we have strengthened the western border of
the country but the way is open for dispatching the food and also for
the import of the fresh fruit which brings them some income. He said
that he had talked to the International Red Cross Committee for
medical supplies for the Afghans as well as representatives of the
World Food Organization and the UNHCR so that difficulties of the
Afghan people could be alleviated.

When we are doing all this then some people coming
out on the plea that we are pursuing anti-Afghan policies which are
not appropriate. The interior minister said that political parties
should not take their differences to an extent where it may turn into
enmity. The concept of tolerance and respect should be fostered and a
working relationship maintained, he observed.

He said it is essential to create a democratic
culture so as to move towards democracy. A Prime Minister should be a
premier of the country and not a party. He maintained that solidarity
could be attained through justice among the provinces, the people and
rich and the poor.

The constitution of Pakistan he pointed out does
mentioned that state religion would be Islam. He questioned the role a
member of religious parties and organizations were playing. What
service sectarian parties are rendering and in what shape they are
presenting Islam before the world. He added that politics is a worship
and not minting money or oppressing the other. He asked the religious
parties not to pursue the policies of division and rather promote the
message of love and understanding which in fact is the message of
Islam.

Borders

Pakistan has turned down a UN request for immediate
opening of its borders with Afghanistan and declared that the borders
would remain sealed until forced by the situation arising out of
possible US strikes against Afghanistan. Within Afghanistan, if the
situation becomes untenable, or if there is an attack, purely for
humanitarian reasons, we will contemplate the opening of border. The
federal minister for frontier regions and Northern Areas, Sarfraz Khan
stated this. He said Pakistan expecting the fresh arrival of refugees
had drawn up a contingency plan in consultation with the UN bodies to
accommodate one million Afghan refugees.

For one million Afghan refugees $122 million will
be needed for the first six months, he said adding that the figure did
not include food support. However, the minister said Afghan women, old
men, children and the seriously sick stranded across the Chaman border
might be allowed entry in due course and sheltered by government of
Balochistan. Asked why Pakistan had been singled out to allow entry to
the Afghans, the minister said the Pakistan government had taken up
the issue with the UN and asked it to talk to other neighbouring
countries like Iran and Central Asian states on the matter as well.

The minister said that only some 6000 Afghans were
waiting on both the main borders i.e. Chaman and Turkham. He however
did not rule out the possibility of striking of a large number of
refugees through unfrequented routes.

Pakistan has made it clear that it was part of the
global coalition against terrorism but can never be part of any
hostile action against Afghanistan.

"Pakistan cannot and can never join any
hostile action against Afghanistan or Afghan people" said Foreign
Office spokesman Riaz Mohammad Khan.

"We are deeply conscious that destinies of the
two people and two countries are inter-twined. There is no joint
operation or contingency plans (by the US) which has been placed
before Pakistan.

The spokesman said it was a fight against terrorism
in which Pakistan was part of international coalition and we wanted
the Afghan government to be responsive to what international community
wants from it. It is not fight against any people or any country.

The spokesman said Pakistan had not asked the
Afghanistan to close down its embassy in Islamabad. The spokesman
regretted the torching of US-embassy in Kabul by an angry mob saying,
"such acts are not in keeping with the diplomatic norms. Part of
the abandoned American embassy was gutted in anti-US demonstrations in
the Afghanistan capital last Wednesday. In response to a question he
said there was no confirmation of the reports that Indian forces had
landed in Uzbekistan. He said the US defence delegation was in
Pakistan and was holding talks with its counterparts. He said the
Afghan embassy in Pakistan was not being asked to close down.

Taliban

Pakistan has opposed replacement of the Taliban
with a government dominated by the Northern Alliance and the US has
said it is sensitive to Pakistani concerns about the need for a
broad-based government. The US government has however made it clear
that it was not an American goal to overthrow the Taliban government.

On the part of the government in Pakistan, it is
making all out efforts to save the situation. A 10-member Ulema's
delegation from Pakistan to Kandhar was an effort of Pakistan
government to avert US military strikes on Afghanistan. The Taliban
however told Pakistan Ulema that they would not bow to US pressure to
extradite Osama bin Laden. There was no question of handing over Osama
bin Laden on moral or religious grounds, said Afghan government.

Pakistan has sounded a note of warning against the
hazards of arming the Northern Alliance.

The warning came from Foreign Minister Abdul Sattar
who has said Pakistan concerned about reports that some Afghan groups
including the Northern Alliance were asking the US for military
assistance. Any decision to arm them would be a recipe for disaster,
plunging the country deeper into factional warfare and adding to the
suffering of the Afghan people. Given history and its geographical
location, Pakistan knows Afghanistan the way no other country does.
For the last two decades especially Pakistan has been closely involved
with happenings in Afghanistan, particularly during the Soviet
occupation and the Afghan people's epic struggle for freedom. In the
post-Soviet period also, Pakistan not only watched but also got
involved in the infighting among Afghan factions for power. The
vicious fratricide has resulted in the deaths of hundreds of thousands
of Afghans. Millions have fled their homes and sought refuge in
neighbouring countries mostly in Pakistan. The Northern Alliance came
into being after the Taliban captured Kabul and then imposed a harsh
brand of theocracy on their people. The Northern Alliance since then
has waged a relentless struggle to recapture Kabul, in the process
causing widespread death and destruction.

Outlook

Pakistan is feared to face an unprecedented current
account deficit and overall budget deficiencies at the end of the
current financial year in the face of heightened uncertainty following
present US-Afghanistan led political and economic crisis. This was an
assessment of the economic conditions in Pakistan by an IMF official.
However, an optimistic view suggests that one should look for an
opportunity in every calamity.

Pakistan's cooperation with the US is based purely
on humanitarian grounds and against the inhumanity of man against the
man. The spirit showed by Pakistan and rest of the civilized world
against the acts of terrorism in Washington and New York on September
11 deserves a display of the same spirit on the acts of state
terrorism in the Indian held Kashmir and Palestine. Now is the time
when all good men should come forward against injustice to human
being. The real civilization is a movement and not a condition, a
voyage and not a harbor.